The 7 Best New Year’s Resolutions for 2023 for Property Investors
The end of the year allows real estate investors to review their 2022 results and set resolutions for the New Year. Setting goals and challenging yourself gives you a competitive edge and can help you reach financial objectives sooner. A Locke and Latham study revealed that 90% of people who set challenging goals outperform their peers. Which resolutions will help you join the group of top performers? We have seven New Year’s resolutions that can provide a jolt of inspiration and generate meaningful business in 2023.
A simple 10–15-minute reading habit will go a long way in expanding your horizons and preparing you for a range of investment scenarios. Don’t forget podcasts, too!
#1: Plan for Taxes
Tax planning isn’t at the top of most people’s lists, but it’s a critical element of sustainable real estate. Waiting until the last minute for your tax preparation can stall property acquisitions and force you to make difficult decisions about how you will raise funds for the bill. Remember Uncle Sam waits for no one!
Estimate how much you will owe in taxes by looking at your income, capital gains, and deductions. Employ a seasoned CPA. Although this may be expensive short term, it can save you heaps of cash long term! You can store that money in a high-yield bank account, so it earns interest while you wait for tax season; some 13-month CDs are currently offering 4.5% plus! Allocating a percentage of each payment to taxes will make future tax seasons easier to navigate.
#2: Allocate More Time for Network Building
Real estate is a people-oriented business. Getting to know more people will help you learn about great deals and skilled service providers. Building relationships with realtors can help you find these deals before they become mainstream. You may come across a real estate professional who has achieved your objectives. Learning from this person at a networking event can help you avoid stumbling blocks and double down on what works in the industry.
Real estate investors have many ways to network. They can attend networking events, including local REIA events, Real Estate Meet Ups, and local Chamber of Commerce events, and many participate in online groups, connect with people on social media, and register for real estate conferences. Investors can also experiment with sponsoring other events to gain more visibility.
Delegating more tasks lets you focus on your zone of genius.
#3: Read More Books
Many real estate professionals have written books detailing their journeys. These books provide glimpses into what worked and did not work for these property investors. You can also read real estate books geared toward your investing style. Investors can find books on topics, such as property flips, rental properties, BRRR, DIY property management, Airbnb, and Foreclosure and Tax Deed Sales.
Many aspire to read more books each year to learn new things, but not everyone follows through with this New Year’s Resolution. You don’t have to read dozens of books this year. A simple 10–15-minute reading habit will go a long way in expanding your horizons and preparing you for a range of investment scenarios. Don’t forget podcasts, too!
#4: Delegate More Tasks
Real estate has many moving parts. You must find deals, promote listings, get on the phone with service providers, respond to tenants, and perform other tasks. These tasks are too much for most people, and it doesn’t make sense for any person to bear the entire mantle of real estate investing.
Delegating more tasks lets you focus on your zone of genius. Having other people respond to emails, pick up the phone, and post on social media gives you more time to find deals and build your network, so maybe consider hiring a VA, or Virtual Assistant, to help you navigate through your many tasks, think of it as an ROI. Each investor has a different zone of genius, but any investor can delegate tasks to focus on their strengths and maximize their returns.
Setting investment goals gives you a sense of direction, but goals change as your preferences change.
#5: Set an Annual Return Target
If you are not growing, you risk losing ground. Real estate investors should set a goal for their 2023 returns. A 10% increase from 2022’s returns is a great place to start. If you invest with this rule in mind and earned $50,000 in 2022, you should aspire to generate $55,000 in 2023. Many rental property owners raise rent prices to match inflation and counter the rising cost of housing. This common practice can provide an initial bump, but you can get more creative with your revenue streams. Here are some ideas to try in 2023 to reach your annual return target:
- Offer storage
- Charge for parking
- Vending machines
- On-property services
- Install solar panels
Investors can also acquire new properties to increase their total returns. Additional cash flow from new assets will speed an investor’s path to a 10% return. While building your real estate empire, you should pay attention to your profit margin. A healthy profit margin is the baseline for sustainable real estate investing. If you must increase your expenses by 20% year-over-year to generate a 10% revenue jump, the growth is not sustainable.
Having funds for the down payments gives you the ability but not the obligation to purchase new properties.
#6: Reassess Your Investment Goals
Setting investment goals gives you a sense of direction, but goals change as your preferences change. Some investors start with property flips to acquire initial capital. These investors may aspire to build a property rental portfolio with those earnings.
An over-leveraged investor may decide to scale back on purchases and focus on building equity in their current properties. You may consider renting out your flips to earn passive income as it may be tougher to get the perfect buyer with interest rates at a current high. This practice is also more common as investors approach retirement. Consider how much money you need for real estate to cover your cost of living. Some people achieve their goals ahead of schedule but proceed to lose everything because they get too greedy.
#7: Accumulate Enough Money for a Set Number of Down Payments
Some real estate investors aspire to acquire a set number of properties in the New Year. Investors with five properties may seek to add two or three new properties by the end of the year. This goal is well-intentioned, but investors may rush deals and make mistakes to hit their property goals.
Investors should instead focus on setting enough money aside as leverage on quality assets, that way, you have the funds to acquire two or three properties, but you don’t have to buy that many properties if you don’t find enough good deals. Building your network increases the likelihood of finding great deals and using that down payment money, but it’s less stressful to accumulate down payment money by the end of the year than rush into deals. Having funds for the down payments gives you the ability but not the obligation to purchase new properties.
Making 2023 Your Best Year Yet
Each New Year allows us to reflect on our progress and set new goals. Prioritizing key objectives and staying focused on your New Year’s resolutions can turn 2023 into your best year yet. Many people use a vision board as a method to keep them on track with their real estate goals. Time is your most valuable resource, and the way you use it will impact your total returns as an investor. Starting the New Year with a solid and strategic plan puts you in a better position to succeed than most investors, so go and make some resolutions now!